1 United States Court of Appeals,

Fifth Circuit.

No. 94-20128.

In the Matter of Patrick Gerald WAINDEL and Susan Louise Waindel,

Debtors.

UNITED STATES of America, Appellant,

v.

Patrick Gerald WAINDEL and Susan Louise Waindel, Appellees.

Oct. 9, 1995.

Appeals from the United States District Court for the Southern

District of Texas.

Before JONES, DUHÉ and STEWART, Circuit Judges.

EDITH H. JONES, Circuit Judge:

The Internal Reven ue Service (IRS) appeals the district

court's and bankruptcy court's disallowance of a tardily filed

claim for unpaid taxes, penalties and interest in the debtors'

Chapter 13 case. The lower courts held that tardily filed priority

claims are disallowed from recovery under Bankruptcy Rule 3002 and

that IRS's claim was not a mere amendment of another claim it filed

in the case. Because IRS apparently finds it difficult to comply

with the bankruptcy rules' 90-day "bar date" for filing proofs of

claim, these questions have arisen repeatedly in recent years, and

conflicting authorities have piled up. S ee, e.g., United States v.

Chavis (In re Chavis), 47 F.3d 818 (6th Cir.1995); United States

v. Towers (In re Pacific Atlantic Trading Co.), 33 F.3d 1064 (9th

Cir.1994); United States v. Vecchio (In re Vecchio), 20 F.3d 555

(2nd Cir.1994); Internal Revenue Service v. Century Boat Co. (In1 See 11 U.S.C. § 502(b)(9) (Supp.1995).

2 re Century Boat Co.), 986 F.2d 154 (6th Cir.1993). Fortunately,

Congress fixed the problem for tax claims in cases filed after

October 22, 1994. 1 As for the many pre-amendment cases, however,

this court sides with the analysis th at holds tardy claims to be

tardy, not disallowed, bu t potentially entitled to no more than

lower-priority recovery from the debtor's estate. 11 U.S.C. §

726(a)(3). In this case, our result reverses the judgments of the

lower courts insofar as the "allowance" of IRS's late-filed claim

is concerned, but we also hold IRS was not enti tled to priority

claim distribution rights and that its late claim was not a

permissible amendment to an earlier, timely claim. The lower court

judgm ents are technically reversed in part and affirmed in part,

but IRS recovers nothing on its tardy claim.

I.

BACKGROUND

Patri ck and Susan Waindel filed a Chapter 13 petition on

August 5, 1991. Before this filing, the IRS notified them that it

was disallowing certain deductions they had taken for the tax years

1982 through 1986. The Waindels listed on the Chapter 13 Statement

filed with their petition an estimated tax liability for 1990 of

$20,000, and estimated and disputed tax liabilities for 1982 and

1983 of $16,850 and $9,500 respectively. No explanation has been

offered as to why the debtors did not schedule estimated and

disputed tax liabilities for the years 1984 through 1986.

The bankruptcy court issued a notice of the § 341 meeting of2 Of the claim for 1990 taxes, $20,059.25 was a priority

unsecured claim, and $737.27 was a general unsecured claim.

3 The claim for 1990 was ultimately reduced to $142.22 in

interest after the IRS received and processed the debtors' 1990

tax return and payment.

3 creditors specifying that all proofs of claims were to be filed

prior to February 4, 1992 in order to be allowed and paid. Shortly

after receiving this notice, the IRS filed a timely proof of claim

for taxes, penalties, and interest for 1990 in the amount of

$20,796.52. 2 On February 6, 1992, two days after the filing

deadline, the IRS filed an "amended" proof of claim asserting a

total claim of $73,781.79 spanning the years 1982, 1983, 1984,

1985, 1986, and 1990. 3

Debtors objected to the amended proof of claim arguing that it

was actually a new claim that must be disallowed because it was not

timely filed pursuant to Bankruptcy Rule 3002(c). Prior to trial,

the parties stipulated that deficiencies for all of the tax years

in question totalled $71,151.98. At trial, the IRS offered

uncontroverte d testimony that the amended proof of claim was

actually prepared on January 6, 1992—well in advance of the

February 4 deadline. Unforeseen personnel changes were blamed for

the tardiness of the actual filing.

The bankruptcy court ruled that because the amended proof of

claim was not of the same generic origin as the original proof of

claim, it did not properly qualify as an amendment, but was

actually a new claim. The bankruptcy court further held that the

bar date set forth in Rule 3002(c) precluded allowance of any4 The court also noted that Bankruptcy Rules 3002(c) and

9006(b)(3) provided for an extension of the bar date upon proper

motion. However, no such motion was filed by the IRS.

4 claims filed after that bar date. 4 The district court affirmed the

decision of the bankruptcy court. The IRS now appeals.

II.

DISCUSSION

Before the enactment of the Bankruptcy Code in 1978, section

57n of the 1898 Bankruptcy Act (her einafter "the Act") barred

late-filed claims from sharing in di stributions of the debtor's

estate. The Waindels assert that the bar date concept was carried

over in to the Code. IRS argues that to the contrary, the Code

eschewed the bar date as a complete bar to recovery and opted

instead for a system that separates claims into two categories,

timely and tardy. It is of course not enough to posit that

Congress meant to preserve the certitude of the bar date. One must

rely upon the text of the Code, if it is plain, as the definitive

guide to congressional intent. S ee United States v. Ron Pair

Enterprises, 489 U.S. 235, 241, 109 S.Ct. 1026, 1030, 103 L.Ed.2d

290 (1989).

The text of the Code does not support a bar date as a complete

bar to recovery. As other courts have noted, sections 501, 502 and

726 are the Code provisions that respectively concern the filing of

claims, their allowance, and the priority of distribu tion to

claimants. Although none of these provisions sets a bar date or

depends for its efficacy on a total bar, the imposition of

deadlines for filing claims is clearly contemplated. Section5 Section 2075 provides in pertinent part:

The Supreme Court shall have the power to

prescribe by general rules, the forms of process,

writs, pleadings, and motions, and the practice and

procedure in cases under title 11.

5 501(c) authorizes a debtor or the trustee to file a proof of claim

for a creditor who has not timely filed in his own behalf. Section

726 permits late-filed claims to share in the debtor's estate in

two circumstances, differentiating according to whether the

claimant had sufficient notice of the bankruptcy to permit a timely

filing. 11 U.S.C. § 726(a)(2)(C), (a)(3). While § 502(b) lists

various exceptions to the "allowance" of claims against the debtor,

however, unti meliness is not among them. The Code therefore

renders timely filing of claims significant for purposes other than

"allowance."

The conc ept of a bar date as preventing recovery from the

debtor's estate arises not from the Code but from Bankruptcy Rule

300 2(a), which requires timely filing of a claim for it to be

"allowed." Keying "allowance" to timeliness is a vestige of

practice under the 1898 Bankruptcy Act; the original authors of

the Bankruptcy Rules more or less transcribed the absolute bar date

rule based on the Act into Rule 3002 accompanying the Cod e. See

Rule of Practice and Procedure i n Bankruptcy 3002, Advisory

Committee's Note; 3 C ollier on Bankruptcy ¶ 3002.02 at 3002-6

(15th ed. 1993). The Advisory Committee, as delegate of the

Supreme C ourt's bankruptcy rulemaking power, had no authority to

write a rule inconsistent with th e Code. 28 U.S.C. § 2075. 5Such rules shall not abridge, enlarge, or modify

any substantive right.

The Supreme Court shall transmit to Congress not

later than May 1 of the year in which a rule prescribed

under this section is to become effective a copy of the

proposed rule. The rule shall take effect no earlier

than December 1 of the year in which it is transmitted

to Congress unless otherwise provided by law.

11 U.S.C. § 2075.

6 The Sixth Circuit recently reached a contrary conclusion in

In re Chavis, 47 F.3d 818 (6th Cir.1995). The Chavis court held

that tardily filed claims were not allowed claims under sections

501 and 502. Id. 823-24. However, as explained above, this

reading renders portions of section 726 superfluous.

The Chavis court also drew a distinction between

chapter 7 and chapter 13 cases. Id. at 824. Although we

agree that there are "fundamental differences" between the

two types of cases, the provisions of chapter 5 apply

equally to both. See 11 U.S.C. § 103(a). Our

interpretation of the Code obviates the need to draw an

extra-textual distinction.

6 Nevertheless, to the extent that Rule 3002(a) declares every

untimely filed claim to be disallowed, the Rule impermissibly

c onflicts with the Code. We agree with the courts, cited above,

that so hold.

In order to read Rule 3002(a) consistently with Code §§ 501,

502 and 726, the bankruptcy rule must be viewed as providing a

dividing line between timely and tardy claims, rather than a flat

ban on the allowance of late-filed claims. A ccord Vecchio, 20 F.3d

at 559 ("[A] rule of procedure that disallows claims for

untimeliness cannot stand."); I n re Pac. Trading Co., 33 F.3d

1064, 1067 (9th Cir.1994); s ee also Cisneros v. United States, 994

F.2d 1462, 1465 (9th Cir.1993). 6

In most cases, the inartful language of Rule 3002(a) makes no7 Chapters 1, 3, and 5 of the Code apply to cases under

Chapters 7, 11, 12, and 13. 11 U.S.C. § 103(a). Although

Chapter 7 does not explicitly apply to Chapter 13 cases, certain

provisions in Chapter 13 incorporate portions of Chapter 7.

Section 1325 requires that a creditor receive an amount "not less

than the amount that would be paid on such claim if the estate of

the debtor were liquidated under chapter 7 of this title ..."

Id. at § 1325(a)(4). See also 11 U.S.C. § 1129(a)(7)(A), as

explained Collier on Bankruptcy (15th ed.) ¶ 1129.02, at 1129-32,

by quoting legislative history that cross-references this

provision to §§ 726(a)(3) and 726(a)(4).

7 practical difference. Section 726 sets forth the order for payment

of claims. The general scheme requires payment of priority claims

followed by unsecured claims and, if any money remains, payment of

late claims, various types of penalties and interest. There will

hardly ever be surplus funds available to the estate after payments

to the first two tiers of creditors in a Chap ter 7 case so as to

enable payments upon untimely general unsecured claims pursuant to

section 726(a)(3). In Chapter 11 and 13 cases, where section 726

furnishes a baseline for distribution priorities under plans, 7 the

plans can incorporate parallel treatment for late-filed claims.

Particular problems have arisen however, in regard to untimely

prior ity claims. S ee United States v. Chavis (In re Chavis), 47

F.3d 818 (6th Cir.1995); U nited States v . Towers (In re Pacific

Atlantic Trading Co.), 33 F.3d 1064 (9th Cir.1994); U nited States

v. Vecchio (In re Vecchio), 20 F.3d 555 (2nd Cir.1994); Internal

Revenue Service v. Century Boat Co. (In re Century Boat Co.), 986

F.2d 154 (6th Cir.1993). More precisely, the question is what

consequences, if any, attach to tardiness in filing a claim that

would otherwise be entitled to priority distribution. IRS argues

here that because Rule 3002(a) does not "disallow" its late-filed8 The portion of the IRS's claim relating to penalties for

failing to file a tax return are given fourth level distribution

8 claim, there is no bar date at al l for priority claims. The

interpretation of the IRS rests on section 726, which provides in

pertinent part as follows:

§ 726. Distribution of property of the estate

(a) Except as provided in section 510 of this title,

property of the estate shall be distributed—

(1) first, in payment of claims of the kind specified in,

and in the order specified in, section 507 of this title

or tardily filed before the date on which the trustee

commences distribution under this section.

(2) second, in payment of any allowed unsecured claim,

other than a claim of a kind specified in paragraph (1),

(3), or (4) of this subsection, proof of which is—

(A) timely filed under section 501(a) of this title;

(B) timely filed under section 501(b) or 501(c) of

this title; or

(C) tardily filed under section 501(a) of t h is

title, if—

(i) the creditor that holds such claim did not have

notice or actual knowledge of the case in time for

timely filing of a proof of suc h claim under

section 501(a) of this title; and

(ii) proof of such claim is filed in time to permit

payment of such claim;

(3) third, in payment of any allowed unse cured claim

proof of which is tardily filed under section 501(a) of

this title, other than a claim of the kind specified in

paragraph (2)(C) of this subsection; ...

The late claim filed by the IRS for back taxes owed by the

Waindels is a priority unsecured claim under section 507(a)(7).

Section 507 claims ordinarily receive first-tier distribution

status as specified in section 726(a)(1). 8 Section 726(a)(1), instatus under section 726(a)(4).

9

contrast to § 726(a)(2), draws no distinction based upon the

timeliness of the filing of t he priority claim. IRS infers from

the omitting of express subordination of late-filed priority claims

that no adverse co nsequences attach to its tardiness, and the

entire tax claim is entitled to first-tier status. S ee I n re

Vecchio, 20 F.3d at 560; Cardinal Mine Supply, 916 F.2d at 1091.

This argument requires us to ignore that third-tier status is

expressly conferred upon " any a llowed unsecured claim proof of

which is tardily filed under section 501(a) of this title, other

than a claim of the kind specified in paragra ph (2)(C) of this

subsection." 11 U.S.C. § 726(a)(3) (emphasis added). I n re

Vecchio described the categorization of late-filed priority claims

among other tardily filed "allowed unsecured claims" as leading to

an "absurd result." 20 F.2d at 558. We disagree. First, priority

unsecured claims are a species of allowed unsecured claims and are

facially within § 726(a)(3). Section 507, which defines claims

entitled to priority, also repeatedly refers to these as "allowed

unsecured claims" of various types. S ee 11 U.S.C. § 507(a)(3),

(4), (5) and (6 ). Priority tax claims are defined as "allowed

unsecured claims of governmental units...." 11 U.S.C. § 507(a)(7).

There is nothing anomalous about providing timely-filed priority

claims first-tier distribution status, while relegating the

untimely claims to third-tier among other untimely filed "allowed

unsecured" claims.

Second, cont rary to V ecchio, it is not illogical that9 Oppenheim, Appel, Dixon & Co. v. Bullock (In re Robintech),

863 F.2d 393, 398 (5th Cir.), cert. denied, 493 U.S. 811, 110

S.Ct. 55, 107 L.Ed.2d 24 (1989) ("Frequent players in the

bankruptcy arena ... are aware that deadlines are important and

should not be heard to complain of unfairness except under the

most egregious circumstances.").

10 late-filed priority claims may receive distribution after certain

tardy general unsecured claims. Only a tiny class of non-priority

creditors receives that benefit: those who failed to receive

timely notice of t he bankruptcy and who then filed in time to

permit payment on their claims. Moreover, priority claimants will

almost always be on notice of the pendency of a case and thus

empowered to protect their rights. 9

Third, Vecchio errs in suggesting that the dichotomy between

subsections 726(a)(3) and (a)(4) will permit late-filed fines and

penalties to receive distributions ahead of timely filed claims for

punitive reli ef based on (a)(4). Consistent with bankruptcy

practice, any claim can be split into its component parts—priority,

secured, unsecured, penalties, etc.—and may receive distribution

based on the resulting spectrum.

Finally, the decision in Ve cchio, disallowing any effective

bar date for priority claims, con flicts with § 501(c), which

permits a debtor to file a proof of claim whenever a creditor does

not timely file its own claim. This provision was intended to

allow debtors to complete the list of claims against the estate in

a timely fashion and to ascertain the basis for and a mounts of

creditors' distributions. The particular object of this salutary

provision was untimely priority claims, becau se of their11

potentially heavy impact on a case. V ecchio 's analysis overlooked

§ 501(c) and in so doing unwi ttingly emasculated it. Our result

reinforces the provision.

Any court that interprets questions under the Bankruptcy Code

must do so with humility—the Code's provisions are not al ways

clear, and they are often overlaid with ancient non-statutory

bankruptcy lore that is difficult to dislodge. The reasonable

disagreements among the circuit and bankruptcy courts in this case

exemplify the problem. We conclude, at variance with some of our

brethren, that for obvious reasons going to the heart of the

efficiency and fairness of the bankruptcy system, the Code attaches

conse quences to failure to comply with proof of claim deadlines.

Further, the Code contemplates no distinc tion between late-filed

priority and other late-filed allowed unsec ured claims, both of

which may recover, if at all, only under § 726(a)(3) or its Chapter

11 or 13 equivalents.

Applying the Code and Rules to the case sub judice

, we hold

that the IRS's tardily filed claim is not entitled to first tier

status as IRS hoped. The claim might be entitled to a distribution

under § 726(a )(3) along with any other untimely allowed secured

claims, but the availability of such relief has not been argued

before us and is waived. C inel v. Connick, 15 F.3d 1338, 1345 (5th

Cir.1994).

The IRS alternatively contended in the lower courts that the

bankruptcy court abused its discretion by not allowing the amended

claim to "relate back" to the date of the original filing. The12

leading Fifth Circuit case on allowance of amendments to proofs of

claim is In re Kolstad, 928 F .2d 171 (5th Cir.) c ert. denied 502

U .S. 958, 112 S.Ct. 419, 116 L.Ed.2d 439 (1991). In K olstad, we

explained that "[a]mendments to timely creditor pro ofs of claim

have been liberally permi tted to "cure a defect in the claim as

originally filed, to describe the claim with greater particularity

or to plead a new theory of recovery on the facts set forth in the

original claim.' " I d. at 175 (quoting In re Int'l Horizons, Inc.,

751 F.2d 1213, 1216 (11th Cir.1985)). However, "courts that

authorize amendments must ensure that corrections or adjustments do

not set forth wholly new grounds of liability." K olstad, 928 F.2d

at 175.

The bankruptcy court and the distri ct court both concluded

that the amended proof of claim set forth new grounds of liability.

The IRS candidly admitted as much at oral argument. We find no

error, much less any abuse of discretion in the court's refusal to

allow the amended claim to relate back to the filing of the initial

proof of claim.

III.

CONCLUSION

The IRS's tardily filed claim is "allowed" under 11 U.S.C. §

502, but it is not entitled to first-tier status under 11 U.S.C. §

726(a)(1). Further, the lower courts did not abuse their

discretion in refusing to allow the amended tardily filed claim to

relate back to the filing date of the original claim. REVERSED in

part, AFFIRMED in part.1 Other circuits have invalidated the bar date in a Chapter 7

context. See United States v. Towers (In re Pacific Atl. Trading

Co.), 33 F.3d 1064, 1067 (9th Cir.1994); United States v.

Vecchio (In re Vecchio), 20 F.3d 555, 559 (2d Cir.1994); see

also IRS v. Century Boat Co. (In re Century Boat Co.), 986 F.2d

154, 158 (6th Cir.1993) (refusing to bar untimely proof of claim

by creditor who lacked notice of the Chapter 7 bankruptcy

filing); United States v. Cardinal Mine Supply, 916 F.2d 1087,

1091-92 (6th Cir.1990) (same). The only circuit to address the

validity of the bar date in a Chapter 13 context has upheld the

bar date. See United States v. Chavis (In re Chavis), 47 F.3d

818, 823-24 (6th Cir.1995). The majority's invalidation of the

bar date in a Chapter 13 case, therefore, creates a circuit split

with the Sixth Circuit's decision in Chavis.

13 DUHÉ, Circuit Judge, concurring in the judgment:

The majority invalidates the claims b ar date of Bankruptcy

Rule 3002 and with that I respectfully disagree. Although the

majority suggests otherwise, its invalidation of the bar date in a

Chapter 13 case creates a circuit split. 1 The majority rejects the

bar date because Section 726(a) allows the payment of a claim even

if proof of it is tardily filed. But § 726 does not apply to a

case under Chapter 13. See 11 U.S.C. § 103(b) (1988). Rather, I

would uphold the bar date in this Chapter 13 case and bar the IRS's

tardily filed proof of claim, thereby affirming the district court.

Because the majority ultimately c oncludes, however, that the IRS

receives nothing on its claim, I concur in the judgment.

We should not invalidate a procedur al rule like Bankruptcy

Rule 3002 absent a strong justification. The Supreme Court has

instructed us to presume the validity of procedural rules. S ee

Hanna v. Plumer, 380 U.S. 460, 471, 85 S.Ct. 1136, 1144, 14 L.Ed.2d

8 (1965). Procedural rules should reflect congressional intent

because Congress acquiesces in their approval. I d.; Sibbach v.2 Sections 501 and 502 create the following framework: A

creditor may file a proof of claim. Id. § 501(a). Other parties

with an interest in the creditor's claim may file a proof of

claim if the creditor does not file it timely. Id. § 501(b),

(c). If a proof of claim is filed in accordance with § 501, the

claim is deemed allowed unless a party in interest objects. Id.

§ 502(a). Section 502(b) then lists eight substantive reasons

for disallowing claims. Therefore, § 501 gives certain parties

the substantive right to file a proof of claim, and § 502

provides for an analysis of the merits of the claim filed in

accordance with § 501. In re Tucker, 174 B.R. 732, 739

(Bankr.N.D.Ill.1994).

14 Wilson & Co., 312 U.S. 1, 14-15, 61 S.Ct. 422, 426-27, 85 L.Ed. 479

(1941). The rigorous adoption process for procedural rules creates

a strong presumption that the rules properly reflect the balance

between substantive and procedural law. S ee Hanna, 380 U.S. at

471, 85 S.Ct. at 1144; Sibbach, 312 U.S. at 14, 61 S.Ct. at 426-

27. Consequently, we should invalidate a Bankruptcy Rule only if

it is plainly inconsistent with the Bankruptcy Code or if it

transgresses the Constitution. S ee Hanna, 380 U.S. at 471, 85

S.Ct. at 1144; C isneros v. United States (In r e Cisneros), 994

F.2d 1462, 1465 (9th Cir.1993); c f. FDIC v. Hirsch (In re Colonial

Realty Co.), 980 F.2d 125, 132 (2d Cir.1992) (h armonizing two

statutes with arguably inconsistent requirements when possible).

The majority impliedly concedes that Bankruptcy Rule 3002 is

not inconsistent with 11 U.S.C. §§ 501-502 (1988) (amended 1994).

Both Sections are si lent as to a bar date or the ability of a

creditor to file an untimely claim. 2 Section 501, however,

contemplates a procedural requirement of timely filing by expressly

referring to untimely claims. The legislative history of § 5013 "The Rules of Bankruptcy Procedure will set the time

limits, the form, and the procedure for filing, which will

determine whether claims are timely or tardily filed." H.R.Rep.

No. 595, 95th Cong., 1st Sess. 351 (1977); S.Rep. No. 95-989,

95th Cong., 2d Sess. 61 (1978), reprinted in 1978 U.S.C.C.A.N.

5787, 5847, 6307.

15 further supports the existence of a timeliness requirement. 3

Section 501, therefore, incorporates Bankruptcy Rule 3002 so that

timeliness is a prerequisite to allowance of a claim under § 502.

Chavis, 47 F.3d at 823; I n re Tucker

, 174 B.R. 732, 739

(Bankr.N. D.Ill.1994); G ullatt v. United States (In re Gullatt),

169 B.R. 385, 387 (M.D.Tenn.1994); I n re Zimmerman, 156 B.R. 192,

195-96 (Bankr.W.D.Mich.1993) (en banc); s ee also 8 Collier on

Bankruptcy ¶ 3002.02[1], at 3002-4 (Lawrence P. King ed., 15th ed.

1995) (noting that Rule 3002 complements Sections 501 and 502).

The Second Circuit, in ad dition to the majority, relied on

Section 726 rather than Sections 501 or 502 to invalidate Rule

3002. S ee Vecchio, 20 F.3d at 557-58. Unlike the majority or the

Second Circuit, the Ninth Circuit invalidated the bar date based on

its absence from §§ 501 and 502. S ee Pacific Atl. Trading, 33 F.3d

at 1067. Noting that untimeliness was not listed in § 502(b) as a

reason for disallowin g a claim, the Ninth Circuit considered the

bar date's absence telling because § 57n of the Bankruptcy Act had

barred untimely proofs of claims. I d. at 1066-67. The Ninth

Circuit's reasoning is faulty, however, because untimeliness is a

procedural bar that Congress properly omitted from the substantive

exceptions of § 502(b). Further, we do not accept arguments that

would effect a major change in the bankruptcy laws from pre-Code4 As of the effective date of the plan, the value of a plan's

payment of an allowed unsecured claim must be "not less than the

amount that would be paid on such claim if the estate of the

debtor were liquidated under chapter 7 of this title on such

date." 11 U.S.C. § 1325(a)(4) (1988).

16 practice without some signal from Congress. Dewsnup v. Timm, 502

U.S. 410, 419, 112 S.Ct. 773, 779, 116 L.Ed.2d 903 (1992); s ee

also Keene Corp. v. United States, --- U.S. ----, ----, 113 S.Ct.

2035, 2041, 124 L.Ed.2d 118 (1993) (requiring a change in the

underlying substantive law to be clearly expressed).

The panel majority relies instead on § 726 to invalidate Rule

3002. This is a Chapter 13 case, however, not a Chapter 7 case.

Subtitle I I of Chapter 7, which includes § 726, applies only to

Chapter 7 cases. 11 U.S.C. § 103(b); s ee In re Stuart, 31 B.R.

18, 20 (Bankr.D.Conn.1983) (refus ing to apply § 726(a)(3) to

Chapter 13). It is quite clear that § 726 does not apply to

Chapter 13.

The requirement that a Chapter 13 plan of reorganization

provide creditors with at least what they would receive in Chapter

7 does not obliter a te § 103(b). 4 Section 1325(a)(4) is a Chapter

13 provision. It instructs a bankruptcy judge to gauge the Chapter

13 plan against what a creditor would receive in Chapter 7.

Section 1325(a)(4) refers generally to Chapter 7, but makes no

express reference to § 726. It makes little sense to subvert §

103(b) by using the general reference in § 1325 to incorporate the

specific language of § 726 into Chapter 13.

The majority invalidates the bar date totally rather t han

distinguish between Chapters 7 and 13. But solid reasons exist for17

drawing this distinction. In a Chapter 13 case, the debtor

maintains his assets, and a plan governs its payments to creditors.

F inality is vital so that a court can determine whether the plan

satisfies the Chapter 7 baseline requirement. Chavis, 47 F.3d at

824; T ucker, 174 B.R. at 743. Further, the court must be aware of

all claims so that it can determine whether the debtor will able to

make all the payments required by the plan. C havis, 47 F.3d at

824; Z immerman, 156 B.R. at 199; s ee 11 U.S.C. § 1325(a)(6)

(1988).

In contrast, Chapter 7 takes the debtor's nonexempt assets and

divides them among the creditors in accordance with § 726. If any

assets are left over, § 726(a)(6) returns them to the debtor. It

would be inequitable for a debtor to obtain assets from a

liquidation over a creditor who files a tardy proof of claim.

Tucker, 174 B.R. at 742. Consequently, § 726(a)(2)(C) and (a)(3)

are two equitable exceptions to the bar date; they allow creditors

who file tard y proofs of claims to step in line ahead of the

debtor. Id.; see Chavis, 47 F.3d at 824.

Despite the valid justifications for applying the bar date in

Chapter 13 but not in Chapter 7, the majority refuses to draw an

"extra-textual" distinction. Ante at 107 n. 6. But the majority

sees the distinction from the wrong side of t he fence. I am not

suggesting that we apply Chapter 5's provisions inconsistently;

rather, the specific provisions of Chapter 7 modify the general

provisions of Chapter 5 in Chapte r 7 cases. S ee Nobelman v.

American Sav. Bank (In re Nobelman), 968 F.2d 483, 488 (5th5 See Bankruptcy Reform Act of 1994, Pub.L. No. 103-394, §

213(a), 108 Stat. 4106, 4125-26 (1994), codified at 11 U.S.C.A. §

502(b)(9) (West Supp.1995).

6 I am not quite sure how the majority reaches its final

result. The plan, not Section 726, governs distribution to

creditors in Chapter 13. A plan must satisfy requirements other

than § 1325(a)(4) in order to be confirmed by the bankruptcy

court. E.g., 11 U.S.C. § 1322(a)(2) (1988) (requiring deferred

18 Cir.1992) (applying specific language of Chapter 13 over general

language of Chapter 5 in Chap ter 13 case), a ff'd,

--- U.S. ----,

113 S.Ct. 2106, 124 L.Ed.2d 228 (1993). Therefore, Rule 3002's bar

date applies excep t when modified by the specific language of

Chapter 7.

In sum, I do not agree that Section 726 invalidates the bar

date in Chapter 13. "[B]ar dates establish the universe of

participants in the debtor's case...." I n re Kolstad, 928 F.2d

171, 174 (5th Cir.), cert. denied, 502 U.S. 958, 112 S.Ct. 419, 116

L.Ed.2d 439 (1991). They promote a policy of administrative

efficiency and practicality that would be upset if they were not

enfor ced. T ucker, 174 B.R. at 743. The vast majority of courts

considering whether to apply the bar date in a Chapter 13 case have

applied the b ar date. S ee id. at 739 nn. 14-15 (listing cases);

8 Collier on Bankruptcy ¶ 3002.05, at 3002-17. Nevertheless, the

majority strikes down the presumptively valid Rule in this case by

using an inapplicable statute. With that, I respectfully disagree.

Fortunately, Congress's addition of a timeliness bar to §

502(b) will soon render the majority's analysis obsolete. 5 The

majority ultimately reaches the same result that I do, though, so

I concur in the judgment. 6but full payment of § 507 priority unsecured claims unless

creditor agrees to different treatment); id. § 1325(b)(1)

(requiring the debtor to pay an allowed unsecured creditor who

objects to the plan at least what it can from the debtor's

disposable income); id. § 1329(a)-(b)(1) (permitting allowed

unsecured creditor to request postconfirmation modification of

the plan so that it conforms with § 1322). Therefore, I do not

see how the placement of the IRS's claim in § 726(a) determines

the outcome of this case.

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